In the last two years, we audited over 2,000 AdWords accounts at Disruptive Advertising.

After looking through that many accounts, we made a few important discoveries about why so many companies struggle to make money on AdWords.On the surface, AdWords seems like a great marketing opportunity. Your ads show up exactly when and where you want them to, so you can get your website in front of your ideal audience—and only your ideal audience. That’s the idea, anyway. Unfortunately, AdWords management isn’t quite that simple. Yes, I’ve used AdWords to grow a client from 25 employees to 250 employees, but I’ve also seen companies waste hundreds of thousands of dollars on AdWords campaigns without a single sale to show for it.

So, why is it so hard for companies to capitalize on the potential of AdWords? Here are some statistics that might surprise you.

1.Most ad spend is wasted.

After reviewing thousands of AdWords accounts, we made some startling discoveries.

To begin with, on average, 12 percent of the keywords in an AdWords account produce all of the conversions. In other words, if you are bidding on 10 keywords, nine of them are simply budget leeches. Sure, they make your campaigns look bigger, maybe even bring traffic to your site -- but they aren’t producing leads, sales or whatever other conversion metric you are trying to drive.

That means they’re useless.

To make matters worse, those useless keywords are also sucking your budget dry. On average, these keywords account for 61 percent of your ad spend and produce...nothing, The problem is, most companies take a carpet bombing approach to AdWords. Drop enough keywords over your audience and you’re bound hit your target.

The problem with this WWII-era approach to targeting is that—while it does increase your odds of hitting your target audience -- it is an extremely expensive way to run a campaign.Ironically, most companies know which keywords are most likely to produce conversions -- even before they start running ads. The reason they add extra keywords is because they are afraid of accidentally missing out on hidden, unforeseen audience opportunities that might lie within some other group of keywords.

No, there’s nothing wrong with trying out new keywords or ads, but most companies spend the majority of their budget on search terms that never convert -- all while their effective keywords are underperforming due to a lack of budget.

2. Half of ads send traffic to their homepage.

Nearly 90 percent of the AdWords accounts we’ve audited had a terrible landing page strategy. More than half, 52 percent, were sending AdWords traffic to their homepage and -- of the half that were using landing pages -- less than 15 percent were testing their landing pages.

Clicks alone aren’t enough to make your AdWords campaigns profitable. Once your traffic is on your site, you need to convince them to actually convert. No matter how effective your AdWords campaigns are, if you aren’t optimizing your landing page experience, you are leaving a lot of money on the table.

Fortunately, one of the easiest ways to improve your landing pages is to improve your messaging consistency. In other words, your ads should tell people what to expect from your landing page and your landing page should deliver on that promise.To do this, your ad copy needs to be very closely tied to the intent of the keyword that triggers it. For example, if your keyword is “couch”, your ad should have the word “couch” in it. An ad that only talks about “furniture” won’t feel like a good match for your potential customer.

Once they click on your ad, your landing page should also talk about couches, preferably in the headline. If your landing page doesn’t mention couches, your traffic will feel confused, betrayed and frustrated. And then they’ll leave. Now, using this approach may mean that you have to create and test a lot of ads and landing pages. However, our new clients regularly see 50 percent improvements in conversion rate after implementing this sort of advertising granularity, so it’s well worth the effort.

3. Without tracking, most AdWords campaigns fail.

Great analytics is at the heart of any successful online marketing and AdWords is no exception. Don’t just take my word for it, either. According toHubspot's State of Inbound report, simply tracking your inbound marketing increases your likelihood of producing a positive ROI by 1,700 percent. In other words, you are 17-times more likely succeed if you use analytics.

Why is analytics so important to AdWords success? Without analytics, you don’t know what is working and what isn’t, which makes it easy to waste a ton of money without even realizing it. The ability to understand how your ads and your online audience are interacting is one of the biggest reasons AdWords is such a popular advertising platform, so you’d expect that most companies would be tracking everything, right? Shockingly, only about half of AdWords accounts have tracking in place for their site and campaigns.Even fewer are using it effectively.

AdWords advertisers aren’t the only ones making this mistake, either. Hubspot also reports that only 53 percent of companies track their inbound marketing ROI. What does that mean for AdWords marketing? I won’t bore you with the math, but if you run the numbers, the results are daunting: Without good analytics, 97 percent of AdWords campaigns fail.

So, if you can’t be bothered to set up -- much less use -- conversion tracking, you might as well just give your money to Google.

4. Most AdWords accounts are poorly managed.

Ultimately, the underlying reason behind these common AdWords problems is a lack of attention.

Vampiric keywords? Spend enough time in AdWords adding negative keywords and you’ll eventually narrow things down to your high performing terms.

The secret to a successful AdWords account is time. If you want to drive great results, you have to be willing to commit the time it takes to optimize campaign performance.The question is, how much time should you be spending in AdWords? At a minimum, if you are spending at least $10,000/month, you should be spending a minimum of 1-2 hours in your account every week -- just to keep things running smoothly. If you want to take things to the next level, plan on spending at least four to six hours in your account each week.

New campaigns need even more attention. I usually check on them at least three times per day.

This doesn’t mean you have to be making major changes three times a day (or week), but AdWords is like a little kid.The more time and attention you give it, the better it will perform.

Conclusion

After auditing over 2,000 AdWords accounts, it’s become clear that a few common mistakes keep most business from realizing the potential of AdWords. Fortunately, setting up analytics, getting rid of useless keywords, creating consistent messaging and giving your account enough attention are fairly easy fixes that can make a world of difference for your accounts.

The moral of the story? If you want great performance from your AdWords campaigns, stop being a statistic! Get on track in these 4 areas and watch your campaigns soar.

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